9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 1016 - HC - VAT and Sales TaxRefund claim - DVAT Act, 2004 - the Petitioner s refund could not be stopped only because the Respondent chooses to create a demand, pursuant to the reassessment undertaken long after the expiry of the two months period in terms of Section 38 (3) (a) (ii) of the DVAT Act, within which the refund had to be processed - HELD THAT - The legal position as regards creating a demand at the stage when refund is overdue is well settled in a large number of decisions of this Court. Reliance placed in the case of SWARN DARSHAN IMPEX (P) LTD. VERSUS COMMISSIONER, VALUE ADDED TAX AND ANOTHER 2010 (6) TMI 725 - DELHI HIGH COURT where it was held that because of issuance of notice under Section 59 of the said Act, albeit beyond the prescribed time, the refund was not payable, is not tenable. This Court has no hesitation in holding that the exercise undertaken by the Respondent which resulted in the re-assessment order dated 15th March, 2019, creating a demand afresh for the first quarter of 2017-18 is, unsustainable in law. The reassessment exercise appears to have been undertaken at a stage long after the refund amount was due. The refund due could not have been stopped by creating a fresh demand pursuant to such reassessment exercise - the impugned order dated 15th March, 2019 passed by the VATO, Ward 41, creating a fresh demand for the first quarter of 2017-18 against the Petitioner is hereby set aside. Petition disposed off.
Issues:
1. Refund claim under the DVAT Act for the first quarter of 2017-18. 2. Delay in processing the refund claim by the Department of Trade and Taxes. 3. Reassessment leading to a fresh demand despite the refund being overdue. 4. Legal validity of reassessment exercise and its impact on the refund claim. Analysis: 1. The petitioner sought a refund of &8377; 16,05,666/- under the Delhi Value Added Tax Act, 2004 for the first quarter of 2017-18. The petitioner, engaged in trading electronic appliances, filed the original return on 9th August 2017, revised on 26th August 2017, and complied with necessary requirements. The Additional Value Added Tax Officer issued a notice for assessment, and the refund had to be processed within two months from the return filing date. 2. Despite attempts to obtain the refund, the petitioner approached the court when the refund was not granted. The court directed the department to process the refund claim. However, the department proposed a reassessment leading to a fresh demand of &8377; 10,42,774/-, which the petitioner contested as illegal and against established legal principles. 3. The respondent argued that the petitioner's remedy was to challenge the reassessment order through the appropriate legal channels. The court referred to previous judgments, including Swarn Darshan Impex Pvt. Ltd. v. Commissioner VAT, emphasizing that creating a demand when a refund is overdue is not permissible. The court held that the reassessment exercise, resulting in a fresh demand, was unsustainable as the refund was long overdue and could not be withheld based on a new demand. 4. Consequently, the court set aside the reassessment order dated 15th March 2019 and directed the respondent to credit the refund amount with interest to the petitioner's account by a specified date. Failure to comply would result in additional compensation. The court clarified that while the refund should be processed, the respondent could undertake a reassessment exercise for the relevant period, subject to the petitioner's rights and contentions.
|
